As the UAE banking sector comes to terms with new regulations and the implications of VAT, KPMG’s annual UAE banking perspectives report reveals how technological innovation and strong corporate governance will enable banks to transform into robust financial institutions.
The report said that as banks grapple with the new VAT regime and the high compliance costs associated with mandatory VAT registration, banks could be forced to increase their fees to compensate for the additional costs.
KPMG also analyses the validity of exploring and implementing blockchain applications to achieve three objectives – improve operational efficiency, increase revenue and reduce risk.
Emilio Pera, partner and head of Financial Services, KPMG Lower Gulf, said: “Banks in the UAE are operating in very dynamic times. The introduction of new laws and tougher regulations is putting tremendous pressure on banks to re-think their business models. Furthermore, the introduction of VAT has impacted profit margins.
“All these factors are encouraging banks to embrace technological innovation like never before and use it to engage with customers in new and creative ways.”
Source – Arabian Business